Huh?
Naturally, this caught my eye. It's the label of a
graph in "
Pollution and the Firm", an
environmental economics book by
Robert Kohn. The graph is a standard
exponential growth curve with
probability of death as the
x-axis and "willingness to pay" (
WTP) on the vertical
axis. (X=1 can also be an
asymptote, meaning as X->1, WTP->Infinity, in which case the graph is no longer standard exponential.)
Now, all things are fair game in
economics, which makes its business not of evalutating
morals or "
rightness" but rather
efficiencies and
relative worth. I can somewhat understand this, and during my environmental economics class I constantly told myself,
"economics is just a tool". Important to remember,... very important.
But, let's just think about this.
"The Statistical Value of Human Life" Now, I'll stay away from the arguments for the value of
all life. We'll regress back to
H. economicus for a bit and think of just ourselves.
"The statistical value of human life"
What this graph was showing was that as the
probability of
death increased, that our
willingness to pay also increased.
E.g. the more we believed that the robber with a
gun to our head would shoot, the more we would offer
not to have it happen. Or the more deadly we assumed the
poison we had just been tricked into taking, the more we would pay for the
antidote.
These examples show the
meaning but not the
context. Remember this book is titled,
"Pollution and the Firm". Now, I have to admit that I didn't read the book (could ya' tell?) but it just simply scares me (in that
slow dread, kind of way) that
economic students are learning this.
Why? Well, not that it was exactly meant in this way, but essentially this is a
threat. The more
firms (i.e.
mega-corporations and the sort) can threaten our lives with
pollution, the more we would be willing to pay to have it stop. And, who
would we pay?...
This is heavily related to the
Coase Theorem.
Robert H. Coase said that in the event of
externalities (pollution is one) that the affected parties (
polluter and pollutee) have an incentive to end the pollution to their mutual improvement (
Pareto improvement). This is achieved in that the
pollutee pays a certain amount to
polluter in order to improve the (monetary) standing of both. The
prime example of this is a farmer/rancher usage of mutual land. (see
Coase Theorem) But, when this is taken to a different level, beyond just
money and rather to
the value of life, then things become rather disturbing.
Is that what was meant? I don't know. Maybe I'll go back and read the book. Nevertheless, now you know that there's such a chart out there, that
someone is pondering over the statistical value of your life.
Sleep well.